Non-competes and non-solicits for technicians

Where the federal rule stands

In April 2024 the Federal Trade Commission issued a rule that would have banned most non-compete clauses nationwide. The FTC estimated that about 30 million workers, nearly one in five Americans, were subject to a non-compete^[1]. The rule never took effect. A federal district court in Texas set it aside and blocked enforcement on August 20, 2024^[1].

On September 5, 2025, the Commission voted 3-1 to dismiss its appeals in the Fifth and Eleventh Circuits and accept the court's vacatur^[2]. For a home service business, the practical result is simple: no federal rule bans or allows your non-competes. State law, and the specific wording of your agreement, decide whether a court will enforce it.

State law decides, and it varies widely

States fall roughly into four groups. Check which group each of your locations is in before you put a non-compete in front of anyone:

Minnesota is a clear example of a ban. Its statute says any covenant not to compete in an employment agreement is void and unenforceable, while excluding nondisclosure agreements and nonsolicitation agreements from that definition and keeping an exception for the sale of a business^[3]. That pattern, ban the non-compete but allow narrower tools, is worth copying even where non-competes are legal.

Why broad non-competes are a poor fit for technicians

Most techs do not hold trade secrets in the legal sense. They hold skills, a license and relationships with some customers. Courts in states that apply a reasonableness test often refuse to stop someone from earning a living in their trade, especially for hourly workers. Even an enforceable agreement is expensive to enforce: you pay a lawyer to sue a former employee who may have little to collect.

There is also a recruiting cost. The trades need people. About 72,700 openings for electricians^[4] and 40,600 for HVAC mechanics and installers^[5] are projected each year over the decade to 2035, with roughly 12,000 a year for roofers^[6] and 13,700 for pest control workers^[7]. US construction job openings reached 289,000 in September 2026^[8]. Candidates compare offers, and a broad non-compete is a reason to sign elsewhere.

What you are really trying to protect

Before choosing a tool, name the risk. For most service companies it is one of four things:

1. Customer lists and maintenance agreement members being called by a departing tech or sales advisor.
2. Pricing books, margins and vendor terms reaching a competitor.
3. Several key people leaving together for a competitor or to start their own shop.
4. Training investment walking out the door, such as paid certification or manufacturer training.

Each risk has a narrower tool that is more likely to hold up and less likely to deter hiring.

Alternatives that protect the business

Data protection is the most practical step. If every customer record lives in your field service software and access ends at the exit interview, a departing tech takes far less with them than any contract could stop.

Drafting tips if you still use restrictions

Where state law allows them and you decide a restriction is worth it, keep it narrow and specific:

• Limit it to roles with real access to customer relationships or confidential pricing, such as service managers and comfort advisors, not every apprentice.
• Keep the time short and the geography tied to where the person actually worked.
• Give something for it: a signing bonus, a raise or a promotion, especially when adding restrictions to current employees.
• Add a clause choosing the state law and courts where the employee works; many states will not apply another state's law to their residents anyway.
• Review agreements whenever you open a location in a new state.

Put the policy and the agreements together in your employee handbook process, so new hires see them before their first day, not after.

If you already have non-competes on file

Many companies have years of signed agreements from an old template. Do not assume they work, and do not assume they are harmless. In a state that voids non-competes, an employer that keeps demanding them can face claims of its own, and some states require employers to tell current and former employees that unlawful clauses are void.

Ask your lawyer to sort existing agreements into three piles: unenforceable and to be withdrawn, enforceable but broader than needed and to be narrowed at the next review, and appropriate as written. Replace the first two piles with the narrower tools above, and give employees a clear written notice of what changed. Most techs will read it as good news, which is a small retention win in itself.

When a tech gives notice: an exit routine

The days between notice and departure are when customer data and goodwill are most at risk. A calm, consistent routine protects both without treating the person as a suspect:

1. 01

   Thank them and agree the last day

   Decide whether they finish their notice period on the schedule or are paid out. People heading to a direct competitor are often paid out and released early.

2. 02

   Reassign their customers

   Move open jobs, callbacks and maintenance visits to another tech, and have the service manager call key accounts personally.

3. 03

   Collect property

   Truck, keys, fuel card, tablet, meters, uniforms and any paper customer files, checked against an exit list.

4. 04

   Close access

   Field service software, email, shared drives, supplier accounts and the phone system, all on the last day.

5. 05

   Remind, do not threaten

   Give a copy of any confidentiality or non-solicitation agreement they signed, with a neutral note about what it covers.

6. 06

   Hold an exit interview

   Ask why they are leaving and what would have kept them. Track the answers over time; they are your best retention data.

Talking about restrictions with candidates

Be upfront. If an agreement is part of the job, show it before the offer is accepted, explain in plain words what it covers and why, and point out what it does not cover. A candidate who learns about a restriction on day one, buried in a stack of onboarding forms, is more likely to resent it and more likely to leave. A short, fair agreement explained honestly rarely costs you a good hire.

Example: replacing a non-compete with retention tools

Example. A fictional HVAC company in two states had every employee sign a two-year, 50-mile non-compete. Recruiters reported candidates walking away at the offer stage. With its lawyer, the company replaced the non-compete for techs with a customer non-solicitation clause limited to customers each tech served in their last year, a confidentiality agreement covering its price book and membership list, and a retention bonus paid after 12 and 24 months. Service managers and sales advisors kept narrow restrictions where state law allowed them.

The company also tightened access: membership lists stay in the field service software, and accounts close on the last day. In the following hiring season, fewer candidates declined offers, and the company spent nothing on enforcement.

Bring it to your weekly leadership meeting

Retention is the real goal. Use the time you would spend drafting restrictions on the things techs say make them stay: fair and predictable pay, a clear path to the next level, decent trucks and tools, and managers who listen. Our guides to running weekly meetings and driver safety cover two of the day-to-day signals techs notice.

A useful test: if your best tech handed in notice tomorrow, would a contract clause or the way you run the company be what changed their mind? For most shops it is the second. Spend the effort there first, then use narrow agreements to cover what remains.